Canadian resident selling six rentals in great Britain - UK -

QUESTION: MY SON IS A CANADIAN RESIDENT AND HAS SOLD SOME RENTED
FLATS THAT HE HAS OWNED FOR 10 YEARS IN THE UK,HE HAS BEEN A
CANADIAN CITIZEN FOR SIX YEARS.WILL HE HAVE TO PAY CAPITAL GAINS TAX ON HIS
PROPERTY SALE IN THE UK OR CANADA.IF HE HAS TO PAY IN CANADA AT WHAT PERCENTAGE
RATE WILL HE BE
CHARGED

Any capital gain is taxable in Canada from the day he
became a Canadian resident, not from the day he became a citizen.

So,
if he paid $500,000 for them and they were worth $600,000 the day he came
to Canada, and he sold them for $1,000,000 today, his UK capital gain would be
$500,000 and his Canadian capital gain would be $400,000.

Canada taxes
1/2 of a capital gain so he would owe tax on $200,000. Every
province has different tax rates so the following is just approximate. BC,
for instance has 6 progressive rates starting at about 22% on the first $35,000
and topping at about 43% over $130,000

Because the six rentals were
not his residence before he left, they will be taxable in the UK
first.

He will get credit in Canada on line 431 Schedule 1 of his
Canadian return for the tax paid to the UK.

Hi - I am a British citizen who has been
resident in the US for 11 years, and a green card holder for 8 years. I have a
property in the UK which I am considering selling. I have rented it out since I
left, and have been paying tax in the US on the rental proceeds. I gather that I
will have to pay capital gains tax in the US if I sell it. Will the UK Inland
Revenue also expect me to pay capital gains tax on the sale? (It would seem a
little unfair to have to pay twice!)Thanks for your help.

___________________________________________david ingram
replies:

The property is taxable in the US and may be
taxable in the UK first. If it is, the tax will be credited to you US tax
by filing form 1116. This reply to a Canadian will give you a heads
up.

I hold both Canadian and British citizenship. I
own property in the UK (Ihave owned an apartment for about 15 years)and was
wondering about the taxsituation, both in the UK and Canada, if I were to
sell the property there. -------------------------------david
ingram replies:

The UK is similar to Canada in terms of selling a
principal residence.

I can also claim a British Passport but at 64 I am
not likely to do so atthis time.

I know that if (always a
non-resident) I had bought the house as aninvestment, I would not owe any
tax to the UK but would to Canada.

In the case of a house that you used
to live in, it can be subject to UKprivate residence tax relief if you lived
in it before you left and can notreturn because of job circumstances for
either spouse.

If it is just an investment property, it is likely
taxable. It does notmatter much though because the tax will be lower than
the Canadian tax andit "IS" taxable in Canada - the tax paid to the UK
will be a tax credit inCanada on lines 431 and 433 of the Canadian
T1.

I suggest that you need to talk to a UK accountant or maybe the
InlandRevenue itself.

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David Ingram gives expert income tax &
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California to Mexico family, estate,income trust trusts Cross border,
dual citizen - out of country investmentsare all handled with competence
& authority.

Disclaimer: This question has been answered without detailed
information or consultation and is to be regarded only as general
comment. Nothing in this message is or should be construed as advice
in any particular circumstances. No contract exists between the reader and the
author and any and all non-contractual duties are expressly denied. All
readers should obtain formal advice from a competent and
appropriately qualified legal practitioner or tax specialist
for expert help, assistance, preparation,
or consultation in connection with personal or
business affairs such as at www.centa.com. If you forward this message,
this disclaimer must be included."

Be ALERT, the world needs more
"lerts"

David Ingram gives expert income
tax & immigration help to non-resident Americans & Canadians from
New York to California to Mexico family,
estate, income trust trusts Cross border, dual citizen - out of
country investments are all handled with competence &
authority.

Phone consultations are $400 for 15 minutes to 50
minutes (professional hour). Please note that GST is added if product remains in
Canada or a phone consultation is in Canada.

This is not intended to be definitive but in
general I am quoting $800 to $2,800 for a dual country tax return.

$800 would be one T4 slip one W2 slip one or two
interest slips and you lived in one country only - no self employment or rentals
or capital gains - you did not move into or out of the country in this
year.

$1,000 would be the same with one rental

$1,200 would be the same with one business no
rental

$1,200 would be the minimum with a move in or out
of the country. These are complicated because of the back and forth foreign tax
credits. - The IRS says a foreign tax credit takes 1 hour and 53
minutes.

$1,500 would be the minimum with a rental or two in
the country you do not live in or a rental and a business and foreign tax
credits no move in or out

$1,600 would be for two people with income from two
countries

$2,800 would be all of the above and you moved in
and out of the country.

This is just a guideline for US / Canadian
returns

We will still prepare Canadian only (lives in
Canada, no US connection period) with two or three slips and no capital
gains, etc. for $150.00 up.

With a Rental for $350

A Business for $350 - Rental and business likely
$450

And an American only (lives in the US with no
Canadian income or filing period) with about the same things in the same range
with a little bit more if there is a state return.

Moving in or out of the country or part year
earnings in the US will ALWAYS be $800 and up.

TDF 90-22.1 forms are $50 for the first and $25.00
each after that when part of a tax return.

8891 forms are generally $50.00 to $100.00
each.

18 RRSPs would be $900.00 - (maybe amalgamate a
couple)

Capital gains *sales) are likely $50.00 for
the first and $20.00 each after that.